Five Ways HR Can Maximize Data and Analytics

Spencer Stuart asked top talent leaders from three renowned companies about the growing importance of data in human resources. Their responses provide a road map to the function’s future. Let’s take a closer look.

January 16, 2018 – Big data is rewriting the script for how companies around the world do business. The market for big data and business analytics is expected to grow to $203 billion in the next three years. For human resources, the implications include better and more efficient talent management processes, greater insight into whether a candidate will be successful in a new role and a host of other benefits.

Spencer Stuart recently discussed the promise – and potential pitfalls – of the growing role of data in the human resources function with Ross Pollack, executive vice president and chief human resources officer (CHRO) of Lionsgate, Jim O’Gorman, senior vice president of talent and organization at Hulu, and Rick Merritt, senior vice president and CHRO of OSI Systems.

Here are Spencer Stuart’s top five takeaways from those conversations:

1. Success requires a data-ready culture.

Many organizations, even those that are further along in their digital journeys, still have a way to go to fully integrate more sophisticated data analysis into decision-making and also implement the “holy grail” of predictive analytics, said the firm. The good news is that a number of tools are available to help organizations get there. Making the significant leap from relying on built-in practices and assumptions to deploying more data-driven analysis, however, will require that organizational cultures support such a transition.

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If new data, for example, shows that long-held perceptions are false, is the organization open and flexible enough to change? Fortunately, Hulu was: “Our biggest win with data has been in talent acquisition,” Mr. O’Gorman told Spencer Stuart. “Through data we were able to challenge long-held recruitment paradigms for sources of high-performing tech talent. We used data to illustrate that certain pedigreed universities we had historically been hiring from were not consistently delivering the right type of employee for us. The data helped us determine the right universities to partner with.”

2. To adopt data-driven decision-making, effective HR teams need to change how they think about recruiting inside the function.

Embracing the full power of data and analytics often requires organizations to shift their perceptions of what the ideal HR professional looks like, said the search firm. The function, for instance, will benefit from hiring leaders who bring a breadth of experience beyond HR, and can borrow from training found in other functions. Applying this theory as part of its own transformation mission, Hulu brought on analysts with backgrounds in finance, technology and data into its HR organization. Their mission, Hulu told Spencer Stuart, is to help institute data-driven decision-making and created a curriculum enabling the team to approach key decisions in new ways.

3. Be relentless when evangelizing the power of data with the broader business.

The rigor of data and analytics can help HR – and the entire business – run more efficiently and make better decisions, but it can be a challenge to get everyone on board. “When I joined the organization, HR was largely a personnel office,” Mr. Merritt told the search firm. “A headcount request turned into a research project that was only 60 percent accurate. We had poor data that was not well-maintained, and our HR system did not extend outside of North America.”

After building connections between applications and a global HR system, OSI was able to create a transparent dashboard to go paperless, facilitate talent acquisition and double its talent acquisition output. Mr. Merritt’s next task, said Spencer Stuart, was to help other business leaders become more comfortable using data to make talent decisions, which was met with resistance by some despite the HR team’s early wins.

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Mr. Merritt’s advice is to be relentless. “From an HR perspective, too often we wait and ask, ‘Please give us something,’” he told Spencer Stuart. “But instead, I led with, ‘Here’s what we’re going to do,’ and I was persistent about it. You still have to present good business analytics. You still have to justify the reasons you do it, but you have to be relentless with other teams, and I think that’s how we’ve been able to make progress in an organization with very established ways of doing things.”

Data helped Lionsgate move away from annual performance reviews to quarterly conversations with employees – ultimately improving employee engagement and retention. “HR business partners work with business units to ensure these conversations happen,” Mr. Pollack told the recruitment firm. “When they don’t, the data shows that there is higher turnover and lower engagement scores. When they do, these statistics improve.”

5. Beware the dark side of data.

One of the biggest concerns HR executives should have is whether data is reinforcing biases. “If a company has been successful to date and its executive team is composed of middle-aged white men, the data will show that the company should continue to hire this group of people,” Mr. Pollack told Spencer Stuart. HR leaders should partner with HR information systems as well as diversity/inclusion and talent acquisition teams to review the data and ensure the right questions are being asked in order to create paths for diverse individuals to rise through the ranks, he said.

What’s Next?

Data and analytics will continue to reshape the HR function for the foreseeable future, said Spencer Stuart. HR leaders must help tell the story of what the data means for the talent agenda, while applying sound judgment to make the best strategic talent decisions. In an increasingly digital world, HR leaders have the opportunity to serve as advisers and connect the dots on digital, data, organizational culture, talent management and employee engagement.

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The Authors

The research and report was led by a Spencer Stuart team that included: Fran Helms, a member of the firm’s technology, media & telecommunications practice; Jennifer Heenan, a member of the firm’s healthcare practice; Kimberly Fullerton, a member of the Spencer Stuart legal, compliance & regulatory and HR practices; and Tyler Schuessler, a member of the firm’s human resources practice.

While executive search firms traditionally have been slow to adopt technology, clients are now forcing their hand. According to Larry Hartmann, CEO of ZRG Partners, the fastest growing U.S. search firm, clients are finding great value through objective data in all parts of their business. “Hiring is no exception,” said Mr. Hartmann. “Smart clients are embracing new ways to hire top talent and making better decisions using data and analytics in tandem with traditional search approaches.”

The Holy Grail for clients, said Mr. Hartmann, is finding ways to make better hiring decisions and completing them more quickly, with less time actually spent with their search partners. “As we work with our clients globally across industry sectors and geographies, we are seeing the impact of data within the search process leading to better hiring decisions and faster time to fill metrics,” he said.

Ian Ide, managing director and partner at executive search firm WinterWyman, said executives tend to react well to hard data. It’s tangible and provides evidence, allowing clients to draw logical conclusions. “If parameters of the search need to be changed, the data arms the stakeholders for conversations they may need to have throughout their organization,” said Mr. Ide.

Some of the search parameters that may change include compensation level and reporting structure. In other cases, mapping the candidate pool and gaining an understanding of the availability of local talent at the outset of the search helps in deciding whether a search should be conducted nationally or locally, as well as what industries might be particularly viable. “Once we have had enough conversations to have a viable data set, we can provide feedback on a company’s reputation, reaction to the opportunity, target salary and reporting structure along with common questions that have arisen,” said Mr. Ide.

Providing clients with this information early in the search process, he added, allows for adjustments to be made when necessary and possible.

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Big data is indeed rewriting the script for how companies around the world do business! Many big data capabilities such as record linkage, graph analytics, deep learning, and machine learning have demonstrated being critical in the HR applications you mention as well as many other aspects that have a positive impact on outcomes and productivity. One use case worth mentioning is CPL Online. CPL Online leveraged the easy to use, open source HPCC Systems big data platform to track student interaction data, improve its courses, and deliver sophisticated reports to clients in its HR and compliance e-learning courses. Read the… Read more »